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Business and revenue model

Business and revenue model is where a organisation builds its business structure, future goals and its budget estimates - very important for having a successful online business. Should you fail to focus on that, you are bound to repeat the errors of the great dot-com bubble.

I would like to make a semantic point. A business model is not a revenue model. A revenue model is a way to generate revenues, like charging your customers or advertising. The revenue model, on the other hand, has little to do with the reasons why a business will eventually succeed or fail. It is just one piece of the puzzle. Once you have managed to put all the other pieces in place, this one will fit right in.

If you're in the process of planning or starting a business online, you might be wondering what the best way to make money is. Revenue model is a fancy business term that just means "how a business makes money." When it comes to online business and revenue models, there are lots of different choices. If you're planning a new business, you should understand the differences between potential revenue models and make sure the way you're planning to make money will be a good fit for your business goals.

For example, some revenue models will require a big investment of time or money before you start to earn an income. Some might allow you to keep your day job while starting the business. Others might be better suited to running while traveling. The four most common revenue models for online businesses are: selling services, selling products, affiliate marketing and advertising.

Business and revenue modelConceptualization of these models are important. Try to formalize informal descriptions into building blocks and their overall business activities. While many different conceptualizations exist, Osterwalder proposed a synthesis of different conceptualizations into a single reference model based on the similarities of a large range of models, and constitutes a business model design template which allows enterprises to describe their business model:

The nine building blocks and their relationships, as described by Osterwalder (2004), can be pictorially represented as shown on the left (click on it to enlarge it):-
  1. Infrastructure

    1. Core capabilities: The capabilities and competencies necessary to execute a company's business model.
    2. Partner network: The business alliances which complement other aspects of the business model.
    3. Value configuration: The rationale which makes a business mutually beneficial for a business and its customers.
  1. Offering

    1. Value proposition: The products and services a business offers. Quoting Osterwalder (2004), a value proposition "is an overall view of .. products and services that together represent value for a specific customer segment. It describes the way a firm differentiates itself from its competitors and is the reason why customers buy from a certain firm and not from another."
  2. Customers

    1. Target customer: The target audience for a business' products and services.
    2. Distribution channel: The means by which a company delivers products and services to customers. This includes the company's marketing and distribution strategy.
    3. Customer relationship: The links a company establishes between itself and its different customer segments. The process of managing customer relationships is referred to as customer relationship management.
  3. Finances

    1. Cost structure: The monetary consequences of the means employed in the business model. A company's DOC.
    2. Revenue: The way a company makes money through a variety of revenue flows. A company's income.

Marketing decision models


Business strategies definition

  1. Market and product development
    1. Beta testing
    2. Market research testing
    3. Commercialization of a product
      This is often considered post-NPD (New Product Development).
  2. Business and revenue model
  3. Positioning and differentiation
  4. Multi channel distribution
    'With each new sales channel, a company expands its sales and market coverage'.
  5. Multi channel communication
    The goal of writing multi channel communication plan is to get an audience to invest their time, money or efforts in a product or service.
  6. Marketing communication mix
    The importance of online service for some organisations are indicated by bank Nationwide.
  7. Organisational capabilities
  1. Idea generation
    1. Opportunity analysis
      The strategy of assessing the potential for a change or enhancement to enhance the generation of revenue.
  2. Idea screening
  3. Business analysis
    1. Break even analysis
    2. Benefits of break even analysis
    3. Fourt Woodlock equation
      The tool used to determine whether the product idea will be profitable or not.
  4. Critical path analysis
  5. How to make critical path analysis?
  6. Critical path in business
  7. Logistics strategic plan
    Logistics is how to get raw materials, move them in the system, distribute and replace them.
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